The Following Financial Statements Are for Rupert's Appliances,a Sole Trader,for

question 13

Essay

The following financial statements are for Rupert's Appliances,a sole trader,for the years ending 31 March 20X3,20X4 and 20X5.
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a Calculate the following ratios for the 20X5 year only.Show your calculations.
i Gross profit %,Net profit %,Return on equity %
ii Inventory turnover (times per year),Inventory turnover (days)
iii Accounts receivable turnover (times per year),Accounts receivable turnover (days)
iv Current ratio,Liquidity ratio,Equity ratio %.
b Comment on the ratios calculated above,and the financial statement results for Rupert's Appliances during the years 20X3-20X5 inclusive,in the following areas:
• profitability
• managerial performance
• financial stability.
c Recommend to Rupert what you consider to be the 6 most important things to do to correct his financial position and performance.

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Definitions:

Marginal External Cost

The cost resulting from producing one additional unit of a good that is incurred by someone other than the producer.

Fixed Proportions Technology

Fixed proportions technology is a production process where inputs must be used in strict, fixed ratios to produce outputs, with no possibility of substitution between inputs.

Pollution

The presence of substances in the environment that are harmful to human health, natural ecosystems, or the climate.

Output

The total amount of products or services produced by a company, industry, or economy.